Per Rule 24(18) of the Family Law Rules, courts can order a party to pay an amount of money to another party to cover part or all of the expenses of carrying the case, including their legal fees. An order under this Rule was sought by the wife in Fiorellino-Di Poce v. Di Poce, 2019 ONSC 7074, who wanted the husband to make an interim disbursement to cover her legal fees and the expenses associated with the preparation of a valuation report and an income report with regards to his financial circumstances.
The parties were married for six to seven years before they separated. The husband was very wealthy at the time of marriage and remained so at the time of separation. However, he argued that he should not owe an equalization payment because his net worth decreased during the marriage, such that his net family property amounts to zero.
With respect to spousal support, the husband stated that he had the means to pay whatever amount is awarded, based on the wife’s needs, as he himself spends without a budget. Although he readily admitted that his financial circumstances are extremely complex, the husband argued that the focus should not be on his income and thus, neither an income report nor a business valuation is necessary. The wife, on the other hand, sought financial disclosure from the husband and argued that she needed interim disbursements from the husband for $50,000 to cover her legal fees and $375,000 for a forensic analysis of his income and financial circumstances.
Per the Court’s decision in Morton v. Morton, the purpose of an award for interim disbursements under Rule 24(18) is to level the playing field and ensure that meritorious claims in the family law context are not simply abandoned or forfeited by those who lack financial resources.
An order for interim disbursements is discretionary and will depend on whether the moving party can establish the following:
- The interim disbursements for which an advance payment is requested are important to the matters in issue;
- The disbursements are reasonable and necessary;
- The moving party is incapable of funding the requested amounts;
- The claims being advanced in the case are meritorious, as determined on a balance of probabilities at the time the disbursements are requested; and
- The imposition of payment will not cause undue hardship to the other party.
To support her position on an interim disbursement for her legal fees, the wife provided an estimated budget, which the Court found reasonable given the steps taken in the litigation, the issues raised in the proceedings, and the number of counsel each party has involved. The Court also found that the husband’s position regarding his net family property requires an investigation as to his net worth on the date of marriage.
Since the bulk of his assets relate to his business interests, a business valuation is, therefore, necessary to determine the issue of equalization. However, the Court held that a disbursement for an income report is unnecessary in this case, given the husband’s willingness to pay any spousal support amount that is awarded. As such, the wife was awarded $50,000 in interim disbursements for her legal fees and $200,000 for the preparation of a business valuation report.
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